Video Game Industry Takes 26% July Nosedive

NEW YORK - U.S. video game industry sales in July dropped 26 percent to hit their lowest monthly total since Oct. 2006.

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Physical sales of games hardware, accessories and games amounted to $707.7 million, down from $961.3 in the year-ago period, according to data from research firm NPD Group.

The decline was driven by a 29 percent decrease in hardware sales to $223 million. Sales of games themselves fell 17 percent to $336 million, or 30 percent when including PC games.

The top-selling game of the month was NCAA Football '12 from Electronic Arts, followed by Walt Disney's Cars 2, Activision Blizzard's Call of Duty Black Ops, Disney's Lego Pirates of the Caribbean: The Video Game and Ubisoft's Just Dance 2.

NCAA Football sold 798,000 units, according to analysts, up 15 percent from the year-ago period.

The monthly video game sales report does not account for the increasingly important segments of games sold via digital downloads, mobile and social games or subscription fees for online games.

“There is no getting around the fact that video game sales in the new physical retail channel suffered its lowest month since October 2006," said NPD analyst Anita Frazier. "Despite the very rough month, new physical retail sales are down just 4 percent year-to-date and based on seasonality trends observed over the last 10 years, which have been remarkably stable year-in, year-out, industry sales in this particular channel are poised to land in the flat to minus 2 percent range once the total year is completed.”

But adding in new digital forms of games, which grew strongly in the first quarter, the full year should see video game industry gains, she predicted. "Growth in these areas, combined with a flat to modest decline in new physical sales should result in 2011 showing growth over 2010.”

Email: Georg.Szalai@thr.com

Twitter: @georgszalai